The main concern of the markets this morning was the issuance of GDP data in China during the last quarter of the year, which showed the stability of GDP at nearly its lowest level in three decades at 6.0% with the deterioration of economic conditions in China over the past two years that were affected by the trade war.
But the impact of the continued slowdown in the growth of the second largest global economy has not been strong on global market movements for two main reasons:
1- The USA and China reached an initial documented trade agreement at the beginning of the week that contributed to an improvement in investor appetite for risk and a readiness to improve the conditions of the Chinese economy to some extent in the coming period.
2- Not all data released were negative. Fixed business investment saw growth from 5.2% to 5.4%, retail sales growth remained stable at 8.0%, and industrial production rose from 6.2% to 6.9%.
And after the rise in retail sales in China, the New Zealand dollar witnessed noticeable increases, considering that retail sales will reflect the improvement of domestic demand in the coming period, thus increasing the demand for foreign products, especially coming from New Zealand as a major trading partner with China. The NZD rose from 0.6623 levels to 0.6650 to support the continuation of our purchasing view to 0.67 levels.
As for gold, it has settled in the cross-band between the 1562/40 level as we mentioned earlier with little market momentum, and the situation is expected to continue like this until the beginning of next week at the time when we expect oil prices to continue to rise in the event of breaching the level of $ 59 a barrel It may reach $ 60.50 a barrel next period.
This comes at a time when markets are awaiting consumer price data in the euro area, which is expected to stabilize its growth during the month of December with the control of optimism on the members of the European Central Bank, which was reflected in the minutes of the bank meeting at its last meeting in 2019 with Lagarde confirming the presence of signs On the stability of the growth of the euro area economy to exclude the markets at the present time the bank announced new stimulus measures in its first meeting this year next month. Technically, the euro is currently testing the bullish trend line, and if it rises from these levels it may return back to 1.1160.
Finally .. British retail sales violated market expectations for a continued decline of 0.6%, indicating that the Bank of England is approaching to take a decision to cut interest rates soon, which will undoubtedly pressure the trading of sterling dollars.